the contrarian - THE CIRCLE OF GREED (and the coming crisis)

Every administration has its circle of greed, individuals and companies who - like pigs at the trough - either feed directly off of federal expenditures, or benefit from the policies of the president in power.

Under the George W. Bush administration, however, both the trough and the circle have grown exponentially. The result, today, is a gargantuan machine, which, it is hypothesized here, has been - and is now - driving the nation’s public policy as never before, creating ever more profitable opportunities for those within its circle, to the detriment of most Americans.

The greatest current threat from this behemoth arises out of the circle’s fear that the next election may create an administration controlled by the Democrats, thus potentially dooming the circle dwellers to a mere normal existence. And, when we consider the true scope of the machine, today, in the light of this threat, we have every reason to be concerned - very concerned.

To appreciate the danger, one has to go no further than to consider what it might take to provide a Republican advantage in the ‘08 election, which would then serve to further the interests of those within the circle. The answer is simple, and that answer is a crisis, one that would strike such fear into the minds of the electorate that it would then concentrate its support behind the candidate who would be perceived as being the most capable of dealing with it. If the plan were to succeed, that candidate would, of course, be a Republican.

Much of America believes that the Bush administration has failed the nation by creating historic deficits, by engaging in a needless quagmire in Iraq, by abrogating treaties, by ignoring the threat of global warming, by fostering an economic policy that has caused an orgy of excess in the real estate field without proper regulatory controls, and by conducting a high handed unilateral foreign policy that alienated much of the rest of the world.

Those within the circle of greed, however, have every reason to believe that the president’s track record, in all of these areas, has been right on the money.

As an indication of just what a hero George W. Bush is to those in the “oil patch,” for example, just consider that the price of crude was at a historical low (adjusted for inflation) of $11 per barrel shortly before he ascended to the presidency. Those were cloudy days, indeed, in the patch.

By 9/11/01, the price had risen to $25, at which level the members of OPEC said they could make a reasonable profit. This week, the price is over $90, reaching historic highs, and one can only wonder how many sterling silver Mercedes are being shipped into Saudi Arabia.

To be sure, some of the increase in the price of crude has been due to a greater demand from the emerging economies of China and India. But much of the largesse has gone into bringing very bright, sunny days to the oil patch.

To comprehend even a little of what this has meant, economically, just look at Exxon Mobil. Created from a merger in 1998, that company has seen its annual revenues increase by about $200 billion during the 21^st century.  Again, that is a $200 billion increase in its yearly take during the Bush years.  The common stock has gone up 163% since 9/11.   And the company is literally rolling in dough, with $29 billion in cash.

Another obvious example that demonstrates the extensive scope of the monies involved here is Halliburton, a company, incidentally, in which our vice president, Halliburton’s ex-CEO, is alleged to have a material interest. The price of Halliburton’s common stock has increased 257% since our invasion of Iraq.

And, while the income of most Americans is barely keeping ahead of the cost of living, the billionaires are doing quite well within the circle of greed. Our 400 richest fellow citizens, according to Forbes, have seen their net worth increase by over $400 billion in the just the past two years. That represents a one billion dollar average increase per person. Much of this new wealth was generated in the unregulated financial arena, which foisted inappropriate loans on an unsuspecting public.

What all of this is intended to show is that there are hundreds of billions of dollars at stake in this coming election. If you were to ask, what would people do for that kind of money, the answer might well be a resounding “anything.”

So, what kind of crisis would do the trick for these circle dwellers? Well, the obvious one would be an attack on Iran. A cooperative Bush recently said that Iran is developing nuclear bombs and will be able to launch one into the United States by 2015. Cheney has done his part by saying we won’t let that happen. Does it bother anyone, that this seems to be an eerily familiar replay of the “yellowcake” lie that got us into the Iraq mess?

Does it also bother anyone that, if attacked, Iran might retaliate in ways Hussein could only have dreamed of?  Is it of concern that the resulting disruptions might include a Pakistan in turmoil, a Syria inciting problems in Lebanon and the Palestinian territories, a Turkey moving its troops into Iraq, a Russia reacting unpredictably, and gas at the pump in America going to well over $5 per gallon?

This might, of course, concern most of us, but it would likely be just more good news for those within the circle of greed. What we might see as a problem, they might see only as collateral damage.

Incidentally, the administration’s recent war cries have prompted the head of the U.N. nuclear watchdog agency to set the record straight. Monday, it was reported that the chief of the IAEA said he had not seen “any concrete evidence that Iran has a secret nuclear weapons program underway.”

In yesterday’s news reports he amplified his remark, stating that, while he cannot give Iran a pass right now, he has not seen any nuclear material suitable for weaponry, nor has he seen any indication of “an active weaponization program.” He said there is time to clarify his remaining concerns, and Iran is working with him in order to do so.

Another crisis that would serve the purposes of those within the circle of greed would, of course, be a domestic terrorist attack. It is not suggested that one might be internally generated, however.

And, a final area, that seems to have been quietly developing, is the threat of a crisis with Russia. Daniel K. Simes, president of the Nixon Center and publisher of the National Interest, writes in the November/December issue of Foreign Affairs that “U.S.-Russian relations are deteriorating rapidly. Misguided and arrogant U.S. policies since the end of the Cold War have fueled resentment in Russia…”

Most recently, the Bush administration has further stirred the pot by forging ahead with plans to place a missile defense system in the Czech Republic and Poland, ostensibly to protect Europe from an attack by Iran.

Putin has already said he intends to abrogate the Conventional Forces in Europe (CFE) treaty signed by Mikhail Gorbachev in 1990, and now he says that if we go forward with the plans for the missile sites he will also pull out of the Reagan-era Intermediate-Range Nuclear Forces (INF) treaty.

And, a recent statement by Putin suggested that the cold war has, in fact, already swung back into gear, exhilarating news for those within the circle of greed.

The Russian leader said he was restoring his country’s strategic bomber flights. In a rather ominous sounding announcement, he said: "Today, August 17 (2007) at 00:00 hours, 14 strategic bombers took to the air from seven airfields across the country, along with support and refueling aircraft ... From today such (long range) patrols will be carried out on a regular basis.”

Exactly where the crisis will come from, to preserve the power of those within the circle of greed, is anyone’s guess but, in all likelihood, a crisis will happen.

As a final comment, it should be clearly understood that the fault perceived throughout this article is not that of the Republican Party, nor of the companies in the oil and defense industries, nor of our home grown billionaires, all of whom appear to be performing their functions as they should.

The sole villain in this situation is alleged herein to be our system of what we innocuously call “campaign finance,” which has effectively put the control of our government in the hands of the moneyed interests.

Dave McGill, News Correspondent……………….

Dave’s column, “The Contrarian,” generally published every Wednesday, to Gather Essentials: News will sometimes present a contrary view to various aspects of the news, or an alternate take on the conventional wisdom of the day, and will occasionally also appear on other days of the week………….

Dave has been a senior officer of a large eastern insurance company, involved in economic projections and investment strategy, president of a Midwestern mortgage banking company, and a financial consultant in Southern California, serving clients in the field of commercial real estate development…………….

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